About Us
About the Project
TransCanada and ExxonMobil are working together to advance the Alaska Pipeline Project. The goal is to build and operate a pipeline system that will make possible the development of Alaska’s vast North Slope natural gas resources, helping sustain Alaska’s, Canada’s and the U.S. economies and providing a reliable, clean supply of domestic energy for the State of Alaska and North America. The Alaska Pipeline Project provides Alaska a viable option to develop its North Slope natural gas resources.
- It is progressing all aspects of the pipeline’s development and is best positioned to succeed.
- It has the strongest team of companies in TransCanada and ExxonMobil.
- It has the backing of the State of Alaska.
- It has already secured regulatory certificates in Canada and holds land rights for substantial portions of the pipeline that runs in Canada.
- It possesses world class financial resources.
- It is on track to meet its project commitments, including holding its initial open season in 2010.
A Key Moment
The Alaska Pipeline Project has filed its plan for holding the first natural gas pipeline open season in the history of the North Slope in 2010 - a major milestone in the development of Alaska’s vast natural gas reserves. Read more...
During an open season a pipeline company provides information about its project - including such details as anticipated projects costs, engineering design, tariffs and timelines - to potential customers (shippers) and asks the shippers to commit to ship their natural gas in the pipeline under the terms that are offered. The pipeline company needs long-term transportation commitments - often for several decades into the future - in order to secure the financing required to build and operate the project.
Two Options
During the open season, shippers that want to ship natural gas to markets both inside and outside Alaska will have the opportunity to evaluate the technical and financial feasibility of two pipeline routes and project designs and to indicate the one they prefer.
- One option would transport North Slope natural gas across Alaska to Alberta, Canada, where it could be further transported to North American natural gas markets. Communities in Alaska and Canada would also have the opportunity to access the natural gas for local needs through a number of take-off locations along the pipeline route.
- Another option is to move the natural gas south to Valdez, Alaska, where shippers could arrange to liquefy the gas and ship it on tankers to North American or international markets. Communities in Alaska would have the opportunity to access gas under this option as well.
The Alaska Gasline Inducement Act (AGIA) was designed to test both options. In 2008, the Alaska legislature voted to award the exclusive license to develop the project under AGIA to TransCanada. ExxonMobil, the holder of the largest amount of natural gas on the North Slope, joined the project in 2009.
Major Milestone
The initial step in the Alaska Pipeline Project’s open season has now been taken - with the submittal of the project’s open season plan for the review and approval of the U.S. Federal Energy Regulatory Commission (FERC) on January 29, 2010. Over the following 60 days, through the months of February and March, FERC will have the ability to analyze and provide input into the plan. The general public will also have the ability to review and provide comment on the plan during the month of February. If FERC approves the plan, the Alaska Pipeline Project will hold its open season with potential shippers over the 90-day period that runs from May through July 2010. A separate but coordinated open season for the Canadian portion of the project will be conducted concurrently in Canada.
With the close of the open season at the end of July, potential shippers will indicate whether they wish to ship their natural gas on the pipeline, providing such details as the amount of natural gas that they want to ship on the pipeline, which project option they prefer, and the term of the shipping commitment.
It is important to keep in mind that pipeline builders rarely report open season results immediately after the bids have been submitted. That’s because the shippers’ bids for pipeline space for such a large project as this almost always include conditions, not unlike the contingencies written into a contract for sale of a home. The project will need time to negotiate with potential natural gas shippers to resolve any conditions they place on their bids before reporting results of the open season. The Alaska Pipeline Project is targeting completion of its open season bid review and negotiation process by year-end 2010, contingent on satisfactory negotiation of conditions precedent.
Even when open season results are announced, there may be bid conditions that remain unresolved because they involve issues outside the control of the project. Some of those issues might include North Slope producer discussions with the State of Alaska regarding the resolution of natural gas taxation policies and access to additional Alaska natural gas resources. It may mean that issues such as these, outside the control of the Alaska Pipeline Project, will need to be resolved before shippers are willing to commit to the project.
Meticulous Preparation
By the end of the open season, the Alaska Pipeline Project will have spent approximately US$150 million to develop the extensive engineering designs and other studies needed to produce reliable estimates of what it will cost to construct and operate the gas treatment plant and the pipeline. This work builds on the extensive historical work undertaken separately by TransCanada and ExxonMobil over the past many years.
This extensive preparation has a major bearing on the outcome of the open season, because potential shippers must be confident in the quality and credibility of the offering. The reliability of the engineering, cost estimates and other commercial aspects of the offering are of vital importance to the shippers so that they can make an informed assessment of the risks they must take in making long-term financial commitments for space in the pipeline.